Telstra, Australia's biggest phone company, said it is in talks with Vodafone over the possible sale of its TelstraClear unit in New Zealand.

Telstra "was approached by, and is in discussions with, Vodafone New Zealand to explore the potential sale of Telstra's New Zealand subsidiary, TelstraClear, to Vodafone New Zealand," the company said in a short statement to the ASX. The comments were made in response to media speculation.

The talks are continuing and there is no certainty a deal will be reached, according to the statement from Telstra company secretary Damien Coleman.

In February, TelstraClear reported a return to profit on a pretax earnings basis, reflecting its cost-cutting programme. The Auckland-based company had earnings before interest and tax of $1 million in the six months ended December 31, turning from an EBIT loss of $8 million a year earlier.